Rotorua mayor Steve Chadwick said the increase in population was clearly felt.
"We are seeing it and we are feeling it. We are not only having to increase our number of citizenship ceremonies, but also just bumping into people on the street we are hearing about how they have returned home after living overseas.
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• Liking the green, green grass of home
"We have been feeling them go for a decade and now is the time we are seeing them return, which is exciting."
She said the regeneration of the city and confidence of its residents would be contributing to the increase in population numbers.
"I think [the increase] is linked to the whole reinvention going on in Rotorua and the turn-around in how we feel about the city.
"With the growing pressures in cities like Auckland, people are turning to Rotorua and seeing its merits and the wonderful lifestyle it offers."
Rotorua woman Stoni Matthews has moved back to her hometown to spend time with her sick father-in-law.
"The hardest thing was leaving all the comforts we had in Australia, but it made it so much easier knowing we only had a limited time with my father in-law and that was time we cherished," she said.
"When we first moved back it was a little hard to adjust, and I didn't realise how much I had forgotten about my hometown. This place is still as beautiful as ever, though.
"The streets are so clean, I never saw a place this clean over in Australia," she said.
"My partner and I are both high school drop-outs so we want to spend the next few years getting an education and try to achieve a diploma in something, and being in Rotorua they have so many options to take which we love. It's so hard to study over there if you're not a citizen.
"Australia was necessary for us at the time we moved because we needed the change, things weren't happening for us here then and a change was important.
"I'm so glad we moved, I spent some of the best times of my life over there and met a lot of people ... I'm thankful for the experience and I will go back one day, maybe.
"But for now I'm happy to be in this beautiful country spending time with our whanau who we left behind seven years ago."
Rotorua departures to Australia:
-2013: 734
- December 2013: 51
- 2014: 532
- December 2014: 32
- 2015: 541
- December 2015: 38